Assume a two-commodity, two-country world. Then assume that the U.S. has a comparative advantage in the production of computers and Mexico has a comparative advantage in the production of oil. Which of the following statements is true?
A. U.S. consumption of oil will decrease after the introduction of trade.
B. U.S. consumption of oil will increase after the introduction of trade.
C. Mexico's consumption of oil will decrease after the introduction of trade.
D. All of the statements are true.
B. U.S. consumption of oil will increase after the introduction of trade.
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Consider a country that produces only two goods: pineapples and tractors. Suppose it is possible for this country to increase its production of pineapples without producing fewer tractors. In this case, its current output combination is inefficient
Indicate whether the statement is true or false
An increase in autonomous spending leads to higher ________
A) inflation B) output C) real interest rate D) all of the above E) none of the above
In practice, oligopolistic markets are:
A. fairly common. B. very rare. C. forbidden by the government. D. usually protected by the government.
A large aircraft manufacturer, like Boeing, may have a cost advantage over a new smaller manufacturer because of:
a. diseconomies of scale. b. economies of scale. c. diminishing returns to a fixed factor of production. d. the principal agent problem is generally less severe for larger firms.